Peer-to-Peer Transactions

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Peer-to-Peer Transactions

Sovereign Assets, Layer 1s, Payment Networks

Peer-to-Peer Transactions are direct exchanges of digital assets, information, or value between two individuals or entities without the involvement of intermediaries such as banks, payment processors, or centralized platforms. These transactions are enabled by decentralized networks, allowing participants to transfer funds or data securely and transparently, often using blockchain technology or cryptographic protocols.

Use Case: Peer-to-peer transactions allow someone to send cryptocurrency directly from their digital wallet to another person anywhere in the world, with no bank or third party required to approve, hold, or delay the transfer.

Key Concepts:

• Decentralization — Removes reliance on a central authority or intermediary for transactions.
• Wallet Address — The unique identifier used to send or receive digital assets directly.
• Trustless — Transactions are executed based on code and consensus, not trust in a middleman.
• Permissionless — Anyone can participate in peer-to-peer exchanges without approval or restriction.

Summary: Peer-to-peer transactions empower users with full control over their assets, enabling fast, borderless, and censorship-resistant value transfer in digital economies.

Feature	Traditional System	Peer-to-Peer (Web3)
Intermediaries	Banks, payment processors, custodians	No intermediaries — direct user-to-user
Approval Requirements	Subject to third-party approval and KYC	Permissionless — anyone can participate
Speed of Settlement	Hours to days, especially cross-border	Minutes or seconds, globally
Transparency	Opaque — data stored in centralized systems	Transparent — on-chain and auditable
Censorship Resistance	Can be frozen or reversed by authorities	Immutable and censorship-resistant
User Control	Limited — funds held by third parties	Full control via private keys and wallets
Fees	High fees charged by banks and processors	Low network fees, no middlemen costs
Identity Privacy	Full identity disclosure required	Pseudonymous — tied to wallet addresses
Settlement Finality	Delayed — subject to recalls or reversals	Final — cryptographically secured

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